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The information technology revolution and structural labor change: Evidence from China

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  • Li, Xinpeng
  • Wang, Xiao
  • Xu, Weicheng

Abstract

In this paper, we investigate the role of the new generation of information technology (IT) in explaining process of structural labor change in China. For the analyses, we develop a general equilibrium model of structural labor change driven by both the new technology and the old technology. We improve the model by distinguishing between these two technologies, introducing the new technology penetration rate, and considering the differences in the production structure. We calibrate the parameters according to China's economic characteristics based on Chinese labor market data from 1978 to 2018 and then design a series of counterfactual experiments. The results show that our benchmark model depicts the dynamic characteristics of China's structural labor changes since the reform and opening-up process. The impact of labor market distortions and structural production differences on changes in the labor reallocation is limited. The progress of the new generation of IT may significantly promote China's structural labor adjustment.

Suggested Citation

  • Li, Xinpeng & Wang, Xiao & Xu, Weicheng, 2022. "The information technology revolution and structural labor change: Evidence from China," Economic Modelling, Elsevier, vol. 115(C).
    • Handle: RePEc:eee:ecmode:v:115:y:2022:i:c:s0264999322002024
    DOI: 10.1016/j.econmod.2022.105956
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    2. Santos, Anabela Marques & Barbero, Javier & Salotti, Simone & Conte, Andrea, 2023. "Job creation and destruction in the digital age: Assessing heterogeneous effects across European Union countries," Economic Modelling, Elsevier, vol. 126(C).

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    More about this item

    Keywords

    New generation of IT; Labor structure; Technological progress; Technology penetration rate;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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